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Parties May Struggle To Form Government In Italy

Comic-turned-political leader Beppe Grillo, whose 5 Star Movement capitalized on a wave of voter disgust with the ruling political class, had a surprisingly strong showing. His bloc of seats in Parliament could prove crucial in making any coalition government viable.

More than half the voters supported either Berlusconi's or Grillo's group â¿¿ both of which campaigned against Monti's austerity measures.

Berlusconi has already ruled out an alliance with Monti, whom he blamed for driving Italy deeper into recession.

And on Wednesday Grillo wrote on his blog that his party would not back a confidence vote on any new government formed by mainstream parties, calling instead for a new election soon.

European leaders pleaded with politicians in Italy to quickly form a government to continue to enact reforms to lower Italy's critically high debt of 127 percent of annual economic output and spare Europe another spike in its four-year financial crisis.

Monti held talks with Jose Manuel Barroso, head of the European Commissions, in Brussels on Wednesday amid worries that the lack of political stability in Italy might reignite the eurozone debt crisis. Afterward, they said in a joint statement that they are "convinced that continued and determined action at European and national levels is needed," including agreed reform and budget consolidation efforts to create growth and jobs. Monti and Barroso said, "The crisis is not yet over and efforts must not be relaxed."

Though Italy's annual borrowing â¿¿ its budget deficit â¿¿ is relatively small compared with other euro countries at 3 percent of its annual gross domestic product, its overall debt stands at a colossal â¿¬2 trillion.

Some analysts believe the threat of losing the ECB life preserver might be enough to push Italian politicians into moderating some of their stances so they can form a government and reassure markets.

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